This time, officials may have some useful guidance on how to identify and reach the people likely interested in their offer, thanks to the University of Minnesota and some of the state's rural development agencies.

New Richland renews effort to market free lots to new settlers

New Richland had not seen a private housing development for more than 20 years, so town leaders launched a land giveaway hoping to market its low prices and friendly, Main Street style of business. (Staff photo: Bill Klotz)

The city leaders in New Richland decided five years ago that the best way to keep their town alive might be to give part of it away.

Leaders in the town of about 1,100 people in south-central Minnesota were worried about the demographic trends in their little farm community. The population was declining, the average age was climbing and the tax base was flat.

Their response was to make an offer. Anybody willing to build a home in New Richland could get a free lot in a city-owned subdivision and a big reduction in assessment costs. They just needed to be willing to call New Richland home.

“We wanted to see if we could grow this community,” said Bernie Anderson, a city council member in 2006 when New Richland launched its offer, and president of the State Bank of New Richland, which his family has owned since the 1970s. “But generating growth has been a tough task for many outstate small towns.”

So he was intrigued after reading a story in a banking magazine about a rural town whose land giveaway idea had elicited lots of interest and applicants. He took the idea to fellow council members and they agreed it was worth a try.

The outcome in New Richland so far is mixed. The city gave away seven lots in its 24-lot subdivision during the first two years of the offer, well above the one new home a year the city had averaged in recent years.

Interest started disappearing in 2008, however, as homebuilding markets suffered across the nation.

But New Richland will begin pushing its offer again soon. This time, officials may have some useful guidance on how to identify and reach the people likely interested in their offer, thanks to the University of Minnesota and some of the state’s rural development agencies.

Tucked away in some of the most recent census data, researchers have found evidence that there’s a segment of urban Americans who are reversing the longstanding migration away from rural communities.

One of the big demographic surprises that emerged from the last national census was that during the 1990s, 2.2 million more Americans moved from metropolitan counties to non-metropolitan counties than in the other direction.

Ben Winchester has been leading the search to discover the size of that metro-to-rural migration in Minnesota and to learn who’s making the trek and why.

Winchester, a research fellow with the University of Minnesota’s Extension Center for Community Vitality, has compiled data showing a clear pattern of rural in-migration – and that the trend is occurring throughout the state.

Young adults continue to leave rural America in large numbers in pursuit of education, careers and excitement, which drives overall rural population lower.

But Winchester’s census analyses show that in the age cohorts just ahead of those 20-somethings – the 35- to 44-year-olds – populations increased in almost all rural counties – even those where overall population continued to decline.

“That migration has happened without incentives or effective marketing,” Winchester said. “You’ve got to wonder what would happen if rural America had good marketing tools.”

Winchester isn’t just wondering. He’s working with the staff of the Upper Minnesota Valley Regional Development Center (UMVRDC) in Appleton and the University of Minnesota, Crookston to learn more about the move and what motivated the “newcomers” who have returned to small towns.

They conducted focus groups with about 80 newcomers in the last year, and the development center has contacted another 500 this fall asking them to participate in online surveys.

A narrative is beginning to grow around that migration story.

“There’s a common theme you hear: You can live on one income in a small town,” Winchester said. The lower costs in small towns mean “a parent could stay at home to care for the family’s children.”

Quality of life for families is an important factor for many of the “newcomers,” Winchester said, even though many small towns don’t have hometown schools anymore. “Parents still see more opportunities for their children to be active in academics and extracurriculars in small-town districts.”

But the migration is also motivated by entrepreneurial initiative.

Rural residents aren’t primarily farmers or wage earners anymore; they’re self-employed in all kinds of work, and a low-cost rural town can become a virtual incubator for entrepreneurs, said Jack Geller, director of the Economic Development Administration Center at the University of Minnesota, Crookston.

“I met a man who moved to Springfield, Minn., to operate his cartography business,” Geller said.

The cartographer had clients all over the country, but all he needed to stay in touch was high-speed Internet, which Springfield had, and daily service from FedEx and UPS.

“When he found that in Springfield he sold his house in St. Paul, used the equity to buy an old Victorian house where he could live mortgage-free, and he put together a life that seemed saner for both him and his family,” Geller said.

That’s what the UMVRDC researchers and a marketing class at Southwest Minnesota State University are trying to refine this year.

And their work may be a key in reviving New Richland’s homestead initiative.

The town’s homestead giveaway is already close to being a financial success. Anderson said that if one more home is built, the added taxes will cover the project’s tax increment financing liability, which the town used to repay its land and infrastructure investments in the subdivision.

And after two very slow years it’s time to start marketing the offer again, said Wayne Billing, New Richland’s city clerk and its mayor in 2005 when the giveaway planning started.

“We got a mention in Time magazine when we started this, and we got 300 calls right away,” Billing said. “But when people realized how far we were from California, a lot of them lost interest. So the question we’re facing is: Where do we market? How far away will people be interested in New Richland?”